Illicit trade flows:
how to deal with the neglected economic and security threat
Karl Lallerstedt & Mikael Wigell
Finnish Institute of International Affairs
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trade flows generate massive costs for the EU, yet the countermeasures have
been inadequate. A shortage of data, the tendency to look at different forms of
illicit trade as separate phenomena, and the complexity of the problem have led
to an under-prioritisation of illicit trade among policymakers.
the illicit trade in products that replace those that are generally licit (such
as counterfeit goods and contraband excise goods) represents the biggest
monetary turnover and hurts government and corporate revenues directly. Still,
it is particularly under-prioritised.
effects for smuggling different items relate to the fact that there are over
one thousand international poly-crime groups operating in the EU, the same
smuggling routes can be used for different commodities, and the same corrupt
officials or purveyors of false documentation can deliver their services to
trade also makes the EU more vulnerable to terrorist attacks. It finances
terrorist organisations, and well-established smuggling routes make the borders
the problem, better data need to be generated showing its extent and impact.
Taking a holistic view of the various aspects of illicit trade is important to
facilitate coordination among the relevant authorities. The costs of this work
represent investments which – beyond enhancing security – will generate income
by boosting tax revenues, reducing crime, creating jobs and driving economic